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Interview With Vice President Joseph Biden; Election Day Nears For Virginia, New Jersey

Aired October 30, 2009 - 16:00   ET


WOLF BLITZER, HOST, THE SITUATION ROOM: Happening now: an exclusive interview with the vice president, Joe Biden. He says most Americans don't care what his predecessor, Dick Cheney, has to say. This hour, the V.P. opens up and fights back on the war and the economy.

Hillary Clinton's vindication -- the secretary of state in a CNN interview on her skepticism about Iran and much more. She says it's not her job to just come up with happy talk.

And President Obama goes to new lengths to show he's consulting with his war commanders about Afghanistan. We're taking you inside the White House talks. And we have an eye-opening new estimate about how much a troop surge might actually cost.

I'm Wolf Blitzer in CNN's command center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

Vice President Joe Biden isn't showing any hesitation today about flatly rejecting charges that the Obama White House is dithering. Biden talked about the administration's Afghan war strategy and the economy in an exclusive CNN interview. And he had some choice words for the man behind the dithering charge. That would be the former Vice President Dick Cheney.

Let's go to our senior White House correspondent, Ed Henry. He had a chance to sit down exclusively with the vice president today.

And I take it, Ed, he didn't mince any words.


And I covered the vice president a long time when he was in the Senate. As you know, he's an old-school pol, really loves the game, will, you know, throw an arm around , put your finger in your chest to make a point, really likes to speak bluntly. And, sometimes, that bluntness gets him in trouble around here these days, but, other times, he's just saying what his colleagues are thinking, but maybe won't say out loud.

So, my ears perked up when he told me that he thinks that the economy has hit bottom and is now coming back. I have not heard President Obama, other top officials be that blunt. They have always been very careful about calibrating expectations about the economy. But he sounded a little more bullish today, even as he made clear that there's still a lot of people hurting.

And he also, in fact, said it's not just people feeling a recession. He used the word depression, that some people almost feel like it's a depression.


HENRY: And, so, do you think we have hit bottom?

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Oh, I -- I'm confident we have hit bottom.

The question -- look, we're not going to be satisfied, Ed, until we're able -- I'm able to sit in front of you and say, look, this month, we grew jobs. The net effect is growing jobs.

It doesn't say a lot to people to say, you know, there would have been a million more or 1.6 million more jobs lost but for this. My grandpop used to have an expression, Ed. We lived in Scranton, Pennsylvania. He said, you know when the guy in Dixon City, a suburb, is out of work, it's an economic slowdown. When your brother-in-law is out of work, it's a recession. When you're out of work, it's a depression.

And it's a depression for millions of people.


HENRY: Now, he was also blunt about admitting that there's sort of a disconnect for some Americans. They just do not feel this recovery coming. But he insisted that this -- these new figures in the last couple of days, that there was economic growth in the last quarter of 3.5 percent, he said that's a hopeful sign.

And he said, flatly, that is because of the stimulus, the stimulus that President Obama has put him in charge of implementing, Wolf.

BLITZER: I know you had a good exchange with him on the former Vice President Dick Cheney's dithering charge when it comes to the war in Afghanistan.

HENRY: Absolutely.

What's interesting, the reason why the vice president agreed to do this, we're doing a series starting Monday on "AMERICAN MORNING" about the president's inner circle, and, clearly, this vice president is one of the president's most influential advisers, especially on foreign policy, no topic more urgent than what's going on right now in Afghanistan.

October was the deadliest month there. And the vice president told me he thinks the violence has spiked there because the Taliban is trying to take advantage of what's a really messy and chaotic election process. He says the president needs to take the right amount of time to get the strategy right. And he insisted that Dick Cheney's criticisms are flat-out wrong.


HENRY: Dick Cheney is saying -- your predecessor in this office is saying, the president is failing that test...



HENRY: ... because he says he's dithering, and that you and the president are dragging your feet on this decision.

BIDEN: I like Dick Cheney personally, but I really don't care what Dick Cheney thinks. And I'm not sure a lot of Americans do.

Look at the policy they left us. Look at the policy of neglect they left us in Afghanistan. Look at the policy we inherited in terms of their foreign policy. Look, I -- I think the president is doing exactly what any president should do.

And, by the way, the military thinks that, too.


HENRY: Now, the vice president was also blunt in following up on what Secretary of State Hillary Clinton said today about getting tough with Pakistan, saying the Pakistani government knows where al Qaeda leaders are; they have to step up and go on the attack there.

He was also talking about health care reform, and was also, frankly, blunt, opened up about some of the gaffes that have seemed to maybe have plagued him in the early days. He thinks he's put them behind him.

We're going to have a lot more of that interview Monday on "AMERICAN MORNING" on Monday -- Wolf.

BLITZER: Ed Henry, thanks very much for doing this.

Meanwhile, another round of high-level talks over at the White House today as the president moves closer and closer toward a decision on sending more troops to Afghanistan. This time, he met with members of the Joint Chiefs of Staff, an opportunity to remind Americans he's consulting his war commanders.

Let's bring in our Pentagon correspondent, Barbara Starr. She is working the story for us.

What do we know what happened behind -- behind closed doors today over at the White House Situation Room?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: You know, Wolf, this is the photo-op the president needed, meeting with the Joint Chiefs of Staff, Admiral Mullen, and the heads of all the military services.

The major concerns that the chiefs have is the health of the force, making sure that the troops have all the equipment and weapons that they need, and making sure that they get plenty of time at home in between those tours of duty in the combat zone.

And their major concern is,if the president decides to send tens of thousands of additional troops, they may have to break that promise for more time at home.

BLITZER: You're also getting more information, though, about the cost of an eventual uptick in the number of U.S. troops.

STARR: Absolutely. We -- we have found out that the comptroller at the Pentagon has now given Capitol Hill an estimate, $500,000 per troop per year in Afghanistan. And we will do the math for you -- $500,000 times 40,000, if that's what it turns out to be, a $20 billion price tag -- Wolf.

BLITZER: Billion-dollar.

STARR: Billion.

BLITZER: That's with a B.

Beyond the costs, where would the troops actually wind up going?

STARR: Well, if they make this decision, and General McChrystal gets a substantial number of troops, they are going to head south. We look at the map, Kandahar Province, Helmand Province, the heartland of the insurgency.

BLITZER: Right into the -- where the most serious fighting is.

STARR: Exactly.

BLITZER: A dangerous mission for these men and women.

Thanks very much, Barbara, for that.

Let's check in with Jack Cafferty right now for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, with Nancy Pelosi and the House Democrats unveiling that 1,990-page health care reform bill, it got us to wondering about other landmark pieces of legislation in U.S. history and how long they were.

The original draft of the 1935 Economic Security Act, which established Social Security, 64 pages. The Civil Rights Act of 1964 forbidding discrimination based on race and sex, eight pages. The 19th Amendment to the Constitution giving women right to vote in 1920, one page. The Emancipation Proclamation, which Abraham Lincoln freed the slaves with in 1863, five pages.

And if you really want to get back to basics, the Declaration of Independence was one page long, 1776, and the Constitution of the United States took only four pages in 1787.

Health care reform, Pelosi-style, 2,000 pages. The Democrats say they will post the final version online for lawmakers and the public to read 72 hours before a vote. Well, good luck reading 2,000 pages of anything in 72 hours.

Meanwhile, although the Democrats keep talking about openness and transparency in this process, there are reports, backed up by video, that they blocked the public from attending the unveiling ceremony for their health care bill outside the Capitol yesterday.

There are videos online showing people who were not on a pre- approved guest list being turned away.

Note to Nancy Pelosi: You people don't won the Capitol. We do.

Here's the question. If it took 64 pages to create Social Security, why does it take 2,000 pages to reform health care?

Go to, and enjoy your afternoon -- Wolf.


BLITZER: Two thousand pages. I started reading it. It's not easy reading, by any means, most of those paragraphs incomprehensible, unless you're maybe a trained, not only lawyer, but a scholar.

CAFFERTY: The -- you know what? The government of this country has passed the point of being dysfunctional. It no longer works.

BLITZER: Jack Cafferty, thanks very much. You are going to get some interesting comments, I'm sure.

There's more reason today for the secretary of state to be skeptical about Iran and its nuclear intentions. Does Hillary Clinton feel vindicated? Stand by for her answer. That's coming up in a one- on-one interview she gave CNN today.

Plus, a new charge that American taxpayers are being overcharged by a defense contractor by as much as 16,000 percent. That's 16,000 percent. Yes, you heard it right -- the war in Iraq and broken government now under investigation.

And in our "Strategy Session": Might it actually help President Obama if Democrats are big losers in elections next Tuesday?


BLITZER: All right. Check your calendar. You will notice it's been almost exactly one year since the election of the first African- American president of the United States.

Now a unique documentary marks the upcoming anniversary. HBO's "We the People" offers never-before-seen footage inside the Obama campaign, like this moment featuring a 9-year-old campaign volunteer trying to clear up some confusion over his candidate's name. (BEGIN VIDEO CLIP, "WE THE PEOPLE")

UNIDENTIFIED MALE: Hello. Is this Barbara?

My name is Lorenzo (ph). And I'm 9 years old. I'm a volunteer with the Obama campaign. How are you?

Where's Diana? Who is Diana? Obama is a candidate running for president, no, not -- not Diana. Obama.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: When I was practicing the speech for the first time and I came to the end, where I talked about King speaking in the Lincoln Memorial, and -- and I choked up and had to stop.

I mean, Dr. King's speech happened when I was 2 years old. So, you know, anybody who is 60 or over remembers it vividly. And the -- and the majority of African-Americans at that time couldn't vote, much less run for president.


OBAMA: And it is that promise that 45 years ago today brought Americans from every corner of this land to stand together on a Mall in Washington before Lincoln's Memorial and hear a young preacher from Georgia speak of his dream.









BLITZER: That was exactly at 11:00 p.m. Eastern on election night when we projected that Barack Obama had won the election.

Thanks to our sister network HBO for this new documentary.

Let's talk a little bit about this with our chief national correspondent, John King. He's host of CNN's "STATE OF THE UNION."

John, that was a year ago. This Tuesday, it's a very different situation, elections in New Jersey and Virginia coming up. Here's the question. Has President Obama sort of lost some of that political magic over the course of this year? JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It is the question, Wolf. A lot of analysis will be made of all these races. And that is probably the biggest umbrella question. And watching that documentary only reinforces it, because this was the map one year ago. And you see the blue states and see the big Obama victory.

The question is, is the Democratic base still motivated? When they hear Barack Obama's voice on the radio, as this weekend, will they go out and vote?

Here are the two big states. Here's the state of Virginia. We will walk it through it. First, we will show you the candidates. This is one of the recent polls, the Democrat, Creigh Deeds, way down, down 11 points to the Republican, Bob McDonnell. Republicans are very, very confident about this race.

Here's a little bit of history here and why the Republicans say it would be such a big deal if they win. The Democrats have won five of the last seven gubernatorial elections, back to 1982. So, the Democrats have been trending their way in that state, including having two U.S. senators who are Democrats for the first time, Wolf, in nearly 40 years.

Now, the White House says, it's just one state, it's not a big deal. But the president, despite some differences with the Deeds campaign, has personally campaigned down there twice, and raised some money. So, the White House has invested in the race that is so close to Washington, D.C., and it is a big test for the Democrat vs. the Republican base.

The other big race is up here in the state of New Jersey. This poll is actually about 10 days old. There are some more recent polls that show it closer between the two major candidates, the Democratic incumbent, Jon Corzine, the Republican challenger, Chris Christie.

I show you this one, because this is the poll, a Rutgers university poll. Chris Daggett is an independent. This is the highest he has polled in any of the polls. If he goes this high, many believe the independent could prove the spoiler in this race and tip it to the very unpopular incumbent. So, watch the independent vote in New Jersey.

Again, a little bit of history. The last Republican win statewide, 1997. So, again, the Republicans say, if they can win in this state that Obama carried so big, that has a Democratic governor, they believe, if nothing else, it's proof that it's now conservatives energized, compared to the Democrats a year ago.

And, again, for the president's stake in that, Wolf, he will go there Sunday, the president will, very close to Tuesday's voting. That will be his third visit on behalf of Governor Corzine. And I was just up there in New York and in New Jersey this week. He's on the radio, Barack Obama's voice saying: I need you to go out there and do this for me. Jon Corzine is my partner.

So, the White House trying to lower expectations. You can't make huge conclusions based on two races, but what Republicans are hoping, most of all, is to see, after two very bad years for them, 2006, 2008, do they have the energy and the passion that the Democrats had just a year ago?

BLITZER: Because there was a poll I saw today, a Fairleigh Dickinson poll, that had Chris Daggett at about 14 percent. But it did have Christie two points ahead, I think 41-39, over Corzine. This is very, very close.

Chris Daggett could make a difference in that race, if you assume -- and I guess it's the prevailing assumption -- that he takes votes away from the Republican, Chris Christie.

KING: Many people do believe that. Some Republicans would dispute it. He is more of a moderate Republican. He is pro-choice on abortion. He is pro-same-sex marriage. He said he's a fiscal conservative, and he says the Republican Party has become too captive to the right.

If he gets moderate Republican votes, he could tip the balance in favor of Corzine. What Republicans are hoping is that Democrats who don't like their governor would instead have a credible candidate to vote for. So, Republicans are arguing it could work both ways. If he gets a high number -- no one expects him to get up near 20, although I talked to him this week -- he thinks he's going to win -- but, if he's up this high, anyone -- most people concede, if he's above 15, then Jon Corzine is likely to be reelected.

But it's a wild card.


KING: We really don't know. Fascinating to watch. With so much disfavor for both political parties, this is a big test of whether people are willing to vote for an independent.

BLITZER: He's going to join us live in our 6:00 p.m. Eastern hour.


BLITZER: We will ask him all of those questions. I tweeted earlier in the week, is he the Jesse Ventura candidate of New Jersey, as opposed to Minnesota, and got a lot of buzz as a result of that.


BLITZER: But we will talk to him.

Who is on "STATE OF THE UNION" Sunday morning?

KING: Well, to explore these very questions, number one, we're going to exclusively talk to the House Republican leader, John Boehner, because there's a couple of House special elections out there. And, as you know, he's deep into the fight over health care reform. And we are also going to have an old front here in Washington, Haley Barbour. He's now the governor of Mississippi, but you know well, Wolf, he was the Republican National Committee chairman back in 1993 and '94, when we looked at these races and then went into the mid term election year that saw the Republicans sweep back into power in Washington.

One of the questions for Haley Barbour, not only, can you win the governorships in these two states, but what about next year? He knows how it works. We are going to ask him some questions

BLITZER: He knows politics.

KING: He sure does.

BLITZER: He's a smart guy, Haley Barbour.

Thanks very much.


BLITZER: See you Sunday morning, 9:00 a.m. Eastern, "STATE OF THE UNION."

President Obama reverses what's been in place for 22 years. It involves people infected with HIV and a bill bearing the name of the boy who the world remembers as dying of the disease at a very young age, Ryan White.

BLITZER: And a blast that shook a large city and sparked a fire that burned for two days, what caused it? The FBI now thinks it knows.


BLITZER: Fredricka Whitfield is monitoring some other important stories incoming to THE SITUATION ROOM right now.

Fred, what's going on?


Hello, everyone.

A drop in consumer spending has Wall Street quite worried. The Dow industrials fell 250 points today, giving back all of yesterday's big gains and recording the Dow's biggest loss since April 20. The Nasdaq and the S&P 500 also fell sharply, as investors worry the U.S. economic recovery won't be sustainable.

And President Obama is lifting a 22-year ban on entry into the United States for people with HIV. The president made the announcement as he signed a bill extending federally funded HIV/AIDS treatment for low-income Americans. That bill is known as the Ryan White Act. The order to end that HIV travel ban will be finalized on Monday and take effect in early 2010, completing a process begun during the Bush administration.

And the FBI says last week's explosion at a Puerto Rico fuel depot was caused by a vapor leak. The agent in charge of the investigation says they found no evidence the massive blast was intentional. It sent tremors across San Juan and caused a fire that burned for two days -- Wolf.

BLITZER: That was quite a fire, indeed. Those pictures were amazing.

Fred, thanks very much.

Nearly $200 -- get this -- nearly $200 for something that should cost about $1. American taxpayers -- that's all of us -- we're apparently being overcharged for some vehicle parts in Iraq, and, right now, there's an intense spotlight on one defense contractor. Stand by.

And regarding three Americans being held by Iran, their families are getting a fresh update on how they are doing and making a fresh call for them to be set free.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: Much was made of whether or not President Obama could handle a 3:00 a.m. wakeup call. Well, we can reveal he's had one -- his closest advisers telling me what the crisis was all about. Stand by.

And why Liz Cheney is -- Lynne Cheney, we should say, is upset with President Obama. Should the cameras have followed the president to Dover Air Force Base to salute the fallen?

And it's a decision parents around the nation are grappling with. Should they vaccinate their children against the H1N1 virus? The surprising things they are telling us.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, U.S. officials want clarification. Amid tense nuclear negotiations, is Iran rejecting something it recently accepted? At issue, a nuclear proposal offered to Iran by those countries involved in the talks. According to the officials, last week, Iran agreed to a key idea, sending low-enriched uranium to be refined abroad, but now officials say Iran instead is proposing its uranium be enriched in Iran by a third country, under international supervision.

During her visit to Pakistan, the secretary of state, Hillary Clinton, sat down with our foreign affairs correspondent, Jill Dougherty.

Secretary Clinton says it's not just the U.S. pushing for this.

(BEGIN VIDEO CLIP) JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You have always personally been very skeptical about the fact that they might do what the international community wants them to do. I mean, are you being vindicated in that? Are you right?

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: Well, we are going the extra mile, as we said we would, as the president made clear in his inauguration speech we would. And I think it's very significant that Russia and -- and France and -- and the U.K., Germany, China are all united about this.

I mean, this is not the United States saying, we have an idea we want you to follow through on. This is all of us saying, we came to this idea. You agreed in principle, and we expect to have you follow through.

So, I think we will take it -- you know, take it day by day, see what the final outcome is.


BLITZER: And joining us now, "The New York Times" columnist Roger Cohen.

Roger, thanks very much for coming in.


BLITZER: Is there any doubt in your mind? Are the Iranians trying to build a nuclear bomb?

COHEN: I think the Iranians are trying to build nuclear ambiguity. They have had this program going for 40 years or so, and there's no question that they want to put themselves in a position where, technically, they could move to a bomb.

I've never been convinced that they actually want to make one simply because the alpha and omega of this regime is survival. The supreme leader, Khamenei, is the guardian of the revolution. They know that if they ever produce a bomb, they are putting not only the Islamic republic, but Iran itself at risk.

BLITZER: So, all this negotiation now with the United Nations, the International Atomic Energy Agency, the Obama administration over exporting their enriched uranium and then bringing it back for non- military purposes, is this just for show, or is this serious?

COHEN: I think it's not entirely for show, but what we're seeing right now is a very divided and weakened Iranian government, and a weak president in President Ahmadinejad. What other sense can one make of their ambassador in Vienna agreeing to the export of this low- enriched uranium which they have been gradually building up?

Then it goes back to Tehran and they say, oops, no, we can't, it seems, export it all at once. So they are weak and divided. But I think knowing that weakness and division, they want, if possible, to keep something going on the external front, some kind of negotiation going. And the question now is how long the Obama administration will allow that to go on.

I think we'll need a few more weeks to see exactly what the final Iranian position is. Nobody has actually seen their response yet that I know of, and then we'll have to take it from there.

BLITZER: Realistically, how much time do the Iranians have, do you think, before either of the U.S. or Israel, for that matter, were to use military action?

COHEN: Well, there are a lot of different clocks ticking, Wolf, and the clock ticking fastest, of course, is the Israeli clock, because they are closest to Iran and the most exposed to danger. The French are also very impatient with this.

I think, in essence, the Obama administration has until the end of the year to see if this track produces any results. Then I expect there would be a move to sanctions and, if doable, very tough sanctions.

Personally, I'm very skeptical that sanctions will produce anything for two reasons. One is that I don't believe China and Russia, who are de facto Iranian allies, will come meaningfully on board. And two, Iran has been living with sanctions for decades. They have sophisticated means to circumvent sanctions, and they are pretty much immune (ph) to them.

BLITZER: A lot of our viewers will remember your riveting columns during the demonstrations, the aftermath of the election in Iran. And you were appearing on our program from Tehran as well. It looks like all the demonstrations, the anti-regime uproar, it's very, very invisible, at least to the outside.

COHEN: It is invisible, Wolf, but it's not nonexistent. There's a lot going on beneath the surface. And the Islamic republic, 30 years after the revolution, is weaker and more isolated since June 12 than it was before. Considerably so.

A lot of people who were more or less acquiescent now have moved into pretty much outright opposition, and that's the backdrop to this negotiation, and that's why I think you're seeing so much hesitancy. It's not simply that they are playing for time. It's that they don't really know what to do.

And the overwhelming force always in Iran is inertia, because you have a lot of power centers. All these power centers, or many of them, have a veto power, but none of them has the power to impose its will.

BLITZER: Roger Cohen, thanks very much for coming in.

COHEN: Thanks very much, Wolf.


BLITZER: We're following another story of huge interest to a lot of people around the world, especially here in the United States -- Iran's detention of three Americans for allegedly straying into Iran while vacationing in northern Iraq. Their families are getting new information right now on how they are doing.

Mary Snow has been following this story for us.

What's the latest, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the families have a bit of good news to report. Swiss diplomats visited the three Americans being held in Iran yesterday. The State Department says the visit came after repeated requests.

Now, the families say they were told all three are in good physical shape and that the visit lasted about 40 minutes. The diplomats also brought clothing and some supplies.

Now, this is the second time Swiss diplomats, acting on behalf of the United States, were able to visit Shane Bauer, Sarah Shourd and Josh Fattal, who were detained exactly three months ago today. They were hiking in Iraqi Kurdistan and were detained when they reportedly crossed the border into Iran by accident.

Now, earlier this month, we met with mothers of the three Americans who have been working nonstop to get their children released. They have not spoken to them since they were detained. They are pleading with the Iranian government to allow them to speak with their children directly and, of course, along with the State Department, they are demanding their immediate release. But they certainly are relieved that they were able to get the second visit in.

BLITZER: Let's just hope that they are OK and that they get out quickly.

Appreciate it very much, Mary, for that.

It's not just Dick Cheney who's going after President Obama. Liz Cheney, his daughter, is as well. And she's not very happy about the commander-in-chief's photo-op with the flag-draped caskets of troops.

Just ahead, is her criticism fair game?

Americans are paying to rebuild Iraq, and they're apparently being overcharged many, many, many times over. Its broken government right now under investigation.

And new charges that the Senate majority leader is playing politics with health care reform. It's a huge risk for Harry Reid, and his political career could depend on it.


BLITZER: Startling new information about U.S. taxpayer money apparently being wasted big time in Iraq just a day after President Obama signed off on another $130 billion for America's war. The alleged culprit this time, a defense contractor accused of overcharging for vehicle parts used in Iraq.

Let's bring in Brian Todd. He's taking a closer look into this story.

When we say overcharging, apparently it was really overcharging.

BRIAN TODD, CNN CORRESPONDENT: Way, way overcharging, yes. The inspector general for Iraq's reconstruction, Wolf, now duking it out in public with this defense contractor over all of this.

The IG's auditors have come up with a list of overcharges that really looks like your worst nightmare at the mechanic's garage.


TODD (voice-over): One hundred ninety-six dollars and fifty cents for a box of washers that's supposed to cost $1.22. Two hundred thirty-seven dollars for a vehicle side mirror that you and I should pay less than $15 for. That's how much the inspector general for Iraq's reconstruction says American taxpayers have been overbilled by a contractor that supplies vehicle parts for the Iraqi army.

STUART BOWEN, INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION: We are going to work with the Army material command, the Army contracting command to ensure that this money is recouped and that the taxpayers' interests are protected.

TODD: Stuart Bowen's report, just released, deals with a California-based company called AECOM Technology Corporation, which provides equipment and logistics support. Bowen's auditors looked in detail at four invoices, a tiny fraction of the total, and found that AECOM could have overbilled the U.S. government about $4 million when it sought repayment for parts and services. Try an 846 percent markup for a jug of coolant and antifreeze.

Contacted by CNN, a senior vice president from AECOM sent a statement. "As the report notes, this is an issue that we self- identified and corrected -- making an immediate repayment over two years ago to the client's satisfaction."

But I also read Bowen a letter from AECOM to his office. In their rebuttal to you, they are using words like "speculative" and "unsupported" to describe your analysis. They say that not only is it flawed and incorrect in a lot of ways, but that they overcredited the U.S. government and that they are owed $268,000.

BOWEN: The overbillings occurred; we know that. They are claiming that they paid them back.

My auditors disagree. We've produced 300 auditor inspections for the last six years, yielding over $300 million in benefits for the taxpayers. Fifty million dollars returned from our investigations. We've been doing this for a long time. (END VIDEOTAPE)

TODD: Bowen and other officials in his office tell us this is part of a much larger problem still going on six and a half years after the Iraq War started. They say they have audited more than 20,000 Defense Department transactions and have found not just overpayments by the government, but also duplicate payments, and even payments to fictitious vendors, Wolf.

It's a mess.

BLITZER: Who is responsible for this? Where does the buck lie, if you will?

TODD: Well, Bowen says the government officials who oversee these contracts have simply got to tighten up. The Department of Defense and other places who oversee these things, they have got to look harder at these things. But in their defense, he says, often, these invoices get submitted all at once. They have got this avalanche of paperwork to go through. They can't catch everything, but he says it's just got to be tightened up, the oversight.

BLITZER: A lot of money at stake.

TODD: Absolutely.

BLITZER: All right, Brian. Thanks very much.

The top Senate Democrat riding a health care roller-coaster this week. On Monday, Harry Reid announced with some fanfare that he would indeed include a government-run option in the Senate's reform bill. On this Friday, though, there are questions about his big pitch and the gamble he's taking.

Let's bring in our senior congressional correspondent, Dana Bash. She's watching this story.

What, if anything, is the Senator himself saying about all of this, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, I tried earlier this week at that press conference to ask Harry Reid if he is making this move to please liberals who are pretty angry in his party. He didn't answer that question, but it does appear that is one of several political reasons why Senator Reid is taking this gamble, and he worked very hard, largely under the radar this week, to make it pay off.


SEN. HARRY REID (D-NV), MAJORITY LEADER: This is a very important week for our country.

BASH (voice-over): A call to action posted on YouTube.

REID: Make sure you contact your representatives back here in Washington and push hard. We want a health care bill that has a public option.

BASH: A blast of political e-mails all week pushing the public option and sending a not-so-subtle reminder it's Harry Reid who put it in the Senate health care bill. "Senator Reid's leadership was on full display," said one e-mail. "He took a courageous stand in fighting for and including the public option."

Why the sudden sales job?

PENNY LEE, FMR. REID AIDE: The more liberal side of the party has, you know, questioned whether or not we could get this done, whether or not the leadership was behind it.

BASH (on camera): And questioned Senator Reid.

LEE: Sure, and questioned Senator Reid.

BASH (voice-over): Penny Lee, a former Reid aide, admits part of the motivation is to reassure an anxious Democratic base.

LEE: It wasn't just a one-time, you know, press conference that he had. Instead, he said I am going to fight for this, I believe in it.

BASH: Lee and others say that's his goal as a national leader, but home in Nevada, where Reid is facing a tough re-election battle, he has different reasons for promoting his support for a public option.

JON RALSTON, NEVADA POLITICAL ANALYST: Harry Reid is in a lot of trouble. That's what I like to call Reid fatigue.

BASH: A recent poll showed 50 percent, half of Nevadans, view Reid unfavorably, a stunningly high figure.

RALSTON: He's not the most personable guy. He's not -- he certainly doesn't have much charisma. And what he does have though is a survival instinct unlike any I've ever seen in politics.

BASH: Survival in Nevada now means appealing to Independent voters, and they tend to support a government-run health care option.

RALSTON: His success here is going to play -- or failure -- is going to play into his main campaign theme, which is re-elect me, I'm the guy in Nevada and the nation needs in Washington. I can get things done.


BASH: A huge risk for Reid, of course, is, what if he can't get it done? What if he can't get the votes for a public option in the Senate health care bill? That is a very real possibility right now, but it is very clear when it comes to this that Senator Reid understands that he's taking this gamble, and he has decided to absolutely fight for it and own it -- Wolf.

BLITZER: Tough battle ahead for him. Thanks very much for that, Dana.

In our "Strategy Session" that's coming up next, a noted columnist says it's time to choose a side on health care.

Plus, after two pilots recently flew past their destination, a debate reignites. Should cameras be put in airplane cockpits? If you think that's a good idea, wait until you hear the problems that could create.


BLITZER: Let's get right to our "Strategy Session.

Joining us now two CNN political contributors -- the Democratic strategist Paul Begala, and the Republican strategist Mary Matalin.

Guys, thanks very much for coming in.

I think you saw Paul Krugman's column in "The New York Times" today entitled "The Defining Moment," in which he urges those waffling Democrats, the so-called Blue Dogs, the moderate or conservative Democrats, to make a decision finally.

He says this: "This is the moment of truth. The political environment is as favorable for reform as it's likely to get. The legislation on the table isn't perfect, but it's as good as anyone could reasonably have expected. History is about to be made -- and everyone has to decide which side they're on"

I suspect you agree with him, Paul?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Well, I do. I think he may be slightly off on the timing.

We're going to have a lot of moments of truth, but we are coming upon one, at least. Can Senator Reid's bill come to the floor? Can he get 60 votes behind it? And this is an almost exclusively Democrats' game.

The Republicans clearly like the status quo. They want to allow insurance companies to ruin your life. Good for them. That's why they are Republicans.

The Democrats though have the responsibility to govern. And if they can't pass this, if they can't bring this up, just to the next level, that's really what leadership is asking for right now. They are asking the moderate Democrats, look, we can try to continue to amend it, but don't kill this thing now. We're making history and that momentum is important. Senator Kennedy, in his memoir, he said the Senate is a chemical place, and I think the chemistry is in favor of reform right now.

BLITZER: Because a lot of Democrats are making the point, Mary, as you know, and you used to hear Bill Clinton say it all the time, don't let the perfect be the enemy of the good. MARY MATALIN, CNN POLITICAL CONTRIBUTOR: Well, this is not only not perfect, it's bad for everybody. And I just love the Democrats that continue to say that the Republicans are for no reform and for the status quo.

Of course they are not for that. They are for what every poll since July has shown the American people want, which is narrow, targeted, specific reform. They do not want -- and it's driving down the numbers in all these races -- this expansive government.

Krugman, who is -- I don't know why the Democrats listen to him. He's just a cranky Keynesian, and he goes on to argue in this piece about that the opponents, the centrist Democrats, can't say what they don't like about the bill.

They can say very precisely what they don't like about the legislation and the vision -- it costs too much, drives costs up, drives quality down, expands government beyond sustainability. They are very specific about it and, oh, by the way, they feel that their seats are threatened by this kind of vision.

BLITZER: He did win a Nobel Prize for economics, Mary, so he's got a track record.

I guess the main point he's making here is, you know what? If it doesn't happen now, the status quo will continue for a long time. This is the best opportunity the country has had to make dramatic health care reform changes. If you don't do it now, the status quo will continue

MATALIN: Can I just say -- I wasn't attacking him personally. Even his own supporters say that his relentless partisanship gets in the way of his arguments. And as for the Nobel awards, we've already had that discussion.

Reform does not have to be a complete takeover of the health care sector. We can compromise on lots of stuff. We can agree on lots of stuff -- pre-existing conditions, increasing competition across state lines, tort reform, all of it. That's what people want: narrow, targeted, incremental reform.

BLITZER: All right.

Paul, go ahead.

BLITZER: I just was wondering when the filibuster rule kicks in.

The Republican Party had the House. It had the Senate. It had the White House. The American people gave them the power, and they decided to keep the status quo.

They did nothing to take on health insurance companies that kick you off of your health insurance even if you've paid your premium, that discriminated against you if you're a woman of childbearing age, that discriminated against you as you become older. They discriminate against you because of pre-existing conditions. Because that's what Republicans want.

Now, the Democrats though, again, have -- now they have the responsibility. They have to decide whether they pass this. And I think Krugman makes a very good point, that these guys have to decide if they want to make history.

BLITZER: I just want to for full disclosure point out -- and Paul, you'll correct me if I'm wrong -- you do give advice to the SEIU, the Service Employees International Union. Right?

BEGALA: I do, and they strongly support the Obama health care initiative. And, you know, and so do I.

BLITZER: I know you do.


BLITZER: All right. Let me move on to politics a little bit. A different form of politics, I should say, Mary.

Peter Beinart, writing in "The Daily Beast," says, "You know what? It might be good for the Democrats if the Republicans win both Virginia and New Jersey, the governors races next Tuesday." "Let's imagine," he writes, "that Democrats lose next week because the GOP's conservative base flocks to the polls while liberals stay home. For Obama, that wouldn't be so terrible. The more confident right wing Republicans become, the more likely they will nominate a Palin-like zealot in 2012."

You like his logic there?

MATALIN: It's an argument supported neither by logic nor data. He argues that off-year elections are not predictive for midterms or subsequent presidential elections unless there's a Republican victory which portends a negative impact on the next election. That's illogical on its face, but it's not supported by data either.

These are not conservatives of any ilk, either of his description, kooky conservatives, or commonsense conservatives. It is Independents that are flocking away from the Democrats because they do not like the -- and those are those very voters that swept Obama in and expanded the Democratic majority. They do not like the aforementioned expansive government.

They do not like the debt. In New York 23, there wasn't a run on conservative social issues. It was on the debt, and that's why Hoffman got in and that's why Independents are flocking to him.

BLITZER: All right.

Very quickly, Paul, go ahead.

BEGALA: Well, the data, of course, was created by the Republicans. And Bill Clinton, who I worked for, left the White House. He handed President Bush the greatest surplus in American history. But the interesting -- I think Peter Beinart is wrong. He's a very smart guy, but he's wrong. Mary is correct about that.

It's never good to lose. And Democrats shouldn't think it's good if they lose.

I'm watching Virginia, because it's a test run of what a lot of Democrats like to do. They seem to believe in the politics of differentiation. Oh, I'm different from Obama. Creigh Deeds, the Democratic candidate for governor for Virginia, would not say that he's an Obama Democrat. He, in fact, then came out and said, "If the public option is passed and states can opt out, I would probably opt out."

So, he's running away from Barack Obama in a state Obama won by six points. Let's see how that works out for him. My guess is he loses by 10 points or more by trying to separate himself from his party's president.

BLITZER: We'll see what happens on Tuesday, guys. And you'll be with us, of course, for coverage.

Thanks very much.

It's a question of airline safety. Should there be cameras in the cockpits recording pilots' every moves? We'll examine the benefits and the drawbacks of this controversial idea.

And we'll also hear from two moms with two very different views of the swine flu vaccine, both committed to protecting their kids' health.


BLITZER: Let's get right to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question is a philosophical one. If it took 64 pages to create Social Security, why then does it take 2,000 pages to reform health care?

Jim writes, "It's due to the litigious swamp that the current health care system has created, and the need to overwrite legislation as a consequence. Simple language just won't hold up in court."

Rich writes, "I see three issues here: 2,000 pages and only 72 hours for the public to review. So much for the so-called transparency of government. The only explanation for the time limit on a bill this size is to keep the voting public uneducated as to what's in it."

"Number two, the number of pet projects the Pelosi regime can piggyback into a bill this size. And three, the ability of our government, specifically the judiciary system, to understand and enforce a bill of this size." Fran writes, "Yes, the documents you mentioned were considerably shorter than the current health reform bill, but they were drafted in simpler times with fewer competing interests to consider. And how many pages of amendments, related legislation and court opinions have been added to those documents since? All required to keep them relevant and useful in our complicated age."

Joe writes, "You know about smoke grenades, right? You make enough smoke, folks can't see what you are really doing. Lawyers have been using them for years."

Don says, "The length of the bill is proportionate to the number of people they have to please in order to get it done. I would rather see a 50-page base package that we, the American public, could read, grasp and discuss, but that makes too much sense and we're talking about Washington. Change? I don't think so."

And B. in Mississippi, "My daughter was born with hydroencephalitis. Next year, when she's 24, my health plan won't cover her anymore. I really don't care how long the bill is or whether Nancy Pelosi let in some folks who wanted to watch the unveiling of the bill in public instead of on TV. I just want the bill to pass."

If you didn't see your e-mail here, you can check my blog at -- Wolf.

BLITZER: All right, Jack. Thank you.

To our viewers, you're in THE SITUATION ROOM.

Happening now, one-on-one with the secretary of state, Hillary Clinton, as she wraps up a controversial visit to Pakistan.